Risk-based approach must recognise insurers are not banks
Regulators must not treat insurers like bankers, Archie Kane, chairman of the Association of British Insurers, has said ahead of today’s ABI conference, the FT reports.
In an FT interview he said: "By and large, the insurance industry has weathered the storm pretty well, as opposed to banking. Therefore it would be potentially damaging to take what was advisory for the banking environment and, without pause for consideration, apply it straight to the insurance sector."
Risk-based approach
"Insurance companies have been moving to a more risk-based approach to how their capital is being calculated and, by and large, that has worked," he said. "I would say insurance is slightly ahead of banking in that [risk-based] approach, having worked on both sides."
"The industry and the ABI is concerned we might create an excessively restrictive regulatory environment. It has to be robust, to be seen as something that can stand up under duress. But there is no point in making it so restrictive that companies and capital will just not operate from here."
Tax need to be the lowest
"Nobody in the industry would argue that we have to have the lowest tax rates in the world, or the most liberal regulatory environment. But you have to keep a competitive eye open, because if you are out of line, capital will just flow elsewhere,” he said.
Regain trust of customers.
"We would be sleepwalking if we did not realise that consumers have lost a certain amount of faith in the financial services sector - and the overall savings and investment industry. However, we need to redouble our efforts to explain the importance of long-term savings and to improve the quality of our products and communication."
